Transcript by The Hon Jenny Macklin MP

Child Support and Families Assistance Amendment Legislation Bill 2010 – Second Reading Speech, Canberra

That this bill be now read a second time.

This Bill contains three measures affecting the family assistance law and child support legislation.

Firstly, the bill includes a measure from the 2009-10 budget that aligns decisions about care of children for the purposes of family tax benefit and child support. This is designed to create simpler rules for separated families.

The Child Support Scheme aims to ensure that children receive the appropriate level of child support from their parents in accordance with their parents’ capacity to provide financial support. Family tax benefit assists with the costs of raising children, taking into account child support and other income available to meet these costs.

The bill makes amendments to provide for a single determination of care for both child support and family tax benefit purposes. Currently, care decisions are made by the Child Support Agency for child support purposes, while care decisions for family tax benefit purposes are made by the Family Assistance Office.

This can mean that the Family Assistance Office and the Child Support Agency recognise different levels of care for the same child. It can also mean that parents do not receive their correct assessments unless they separately notify each agency.

This can put additional strain on separated parents who have to deal with two agencies, and two different sets of rules, when determining the care arrangements for their children.

Aligning the determinations of care between the Child Support Agency and the Family Assistance Office will provide consistency in decisions about the level of care being provided by separated parents who have to deal with both agencies.

This is intended to remove duplication of process and decision making by the Child Support Agency and the Family Assistance Office. We also expect this will reduce objections and appeals flowing from the separate determinations in the two agencies.

Secondly, this bill also contains amendments to the income estimate process under the Child Support Scheme.

In determining their child support obligations, some parents use an estimate of their income. This estimated income is then reconciled against actual income to make sure that the correct amounts have been paid or received.

Currently, when a parent estimates their income for calculating their obligations under the Child Support Scheme, it is for a child support period of up to 15 months, which can cross over up to three financial years.

Estimating income over multiple financial years can be difficult for parents and often leads to inaccurate estimates. Reconciliation cannot occur until the parent’s actual income for each financial year is known. In those cases where the child support period spans up to three financial years, the current system can result in severe delays in reconciling estimates.

This amendment will align estimate periods with financial years.

This means that parents who estimate their income will be required to estimate for a shorter period of time. This measure will make it easier for parents to estimate their income and allow the Child Support Agency to reconcile the estimate automatically, once actual income is known.

These estimates do not affect the length of the child support period, which remains at 15 months. These estimates only change the period over which income estimates are reconciled, from 15 months to a financial year.

This will help improve the accuracy of child support calculations to make sure that the correct information is used.

These changes have been thoroughly canvassed with the Child Support National Stakeholder Engagement Forum, a group jointly convened by the Department of Families, Housing, Community Services and Indigenous Affairs and the Child Support Agency. The stakeholder engagement group includes representatives from a wide range of groups with a policy interest in child support matters.

Lastly, the bill contains amendments to the family assistance law to provide greater flexibility in dealing with family tax benefit non-lodger debts.

The 2008-09 budget announced measures designed to address growing family tax benefit debts arising from circumstances where a family does not lodge their tax returns. Without lodgement of a tax return, the Family Assistance Office cannot reconcile a family’s entitlements to payments and ensure the correct amount of family assistance has been paid.

Changes to this system were proposed by the Australian National Audit Office in its 2006-07 report and implemented in January this year following passage of the Family Assistance Amendment (Further 2008 Budget Measures) Act 2009.

Under those new rules, fortnightly payments of family tax benefit can be temporarily suspended if a person’s tax return has not been lodged within 18 months of the end of the financial year.

This bill amends these temporary suspension provisions so that they will not apply if there is no outstanding family tax benefit debt due to the failure to lodge a required tax return, and gives the secretary the discretion to determine that certain provisions will not apply for a specified period where there are special circumstances.

I commend the bill to the House.

Debate (on motion by Mr Andrews) adjourned.